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Disability Sector Calls For $220 Million Industry Investment Fund

Disability service providers are calling on the government to urgently invest $220 million into the sector, to prevent organisations collapsing under the growing costs of transitioning to the National Disability Insurance Scheme.

Disability service providers are calling on the government to urgently invest $220 million into the sector, to prevent organisations collapsing under the growing costs of transitioning to the National Disability Insurance Scheme.

New research from National Disability Services (NDS) revealed three quarters of disability service providers believed the NDIS was not working well, while one in ten admitted they had discussed closing during the past year.

NDS CEO Chris Tanti said the biggest challenge for the sector was unrealistic pricing limits – which set the maximum prices that providers can charge NDIS participants for specific supports.

While disability service providers previously received block-funding under the state government, the NDIS has shifted disability services to a market-driven consumer model where funding is given to individual clients.

Tanti warned the sector risked market failure unless the government provided more support for providers transitioning to the NDIS.

“[Providers] must [now] invest in new infrastructure and systems at the same time, expand to meet the increased demand in services and absorb greater administrative costs. None of this is factored into NDIS pricing,” Tanti said.

NDS’ State of the Disability Sector report found that half of service providers believed the operating environment in the sector had deteriorated over the last year, with 28 per cent of providers making a loss and 58 per cent unable to provide NDIS services at current prices.

Tanti called on the government to urgently invest $220 million into the sector through an Industry Investment Fund to support providers through the transition.

He said the investment fund would help the sector build business capability, prepare for working under the new NDIS Quality and Safeguards Commission, and reduce growing administration costs created by the scheme.

“$220 million over four years equates to 1 per cent of the annual cost of the fully implemented scheme as an investment in its success,” he said.

“That’s 1 per cent of the cost of the scheme in its first four years to make sure it is a success for the next 50.”

This request for an Industry Investment Fund was backed by recommendations in a Parliamentary committee report released in September.

A spokesperson for the Department of Social Services would not directly comment on whether the government would consider creating a $220 million Industry Investment Fund.

But they told Pro Bono News the government had already committed around $190 million to initiatives supporting providers to transition to the NDIS and grow their workforces.

This includes a $45 million Jobs and Market Fund to support the growth required to meet increased demand, and a $33 million Boosting the Local Care Workforce program thats helps current and potential providers prepare to deliver services under the scheme.

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4 Comments

No other “market-driven consumer model” has prices prescribed by the government in a scheme that requires providers to have significant capital reserves, as payment for support provided can be delayed by months for any number of reasons – none caused or being influenced by the providers themselves. Let’s stop calling it a ‘market driven scheme’. It is highly prescribed, and arguably unsustainable if your a SME provider.

Let’s be clear. The disability “market” is not a market. The NDIA pricing model is entirely artificial and the single greatest threat to quality and supply. As a marketer, in my opinion market “forces” cannot be relied upon to allocate resources under these conditions. Any notion of “market stewardship” within this environment is also difficult to believe.